The Trilemma in History: Tradeoffs Among Exchange Rates, Monetary Policies, and Capital Mobility

  title={The Trilemma in History: Tradeoffs Among Exchange Rates, Monetary Policies, and Capital Mobility},
  author={Maurice Obstfeld and Jay C. Shambaugh and Alan M. Taylor},
  journal={Review of Economics and Statistics},
The exchange-rate regime is often seen as constrained by the monetary policy trilemma, which imposes a stark tradeoff among exchange stability, monetary independence, and capital market openness. Yet the trilemma has not gone without challenge. Some argue that under the modern float there could be limited monetary autonomy; others, that even under the classical gold standard domestic monetary autonomy was considerable. This paper studies the coherence of international interest rates over more… 

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